What Should You Know about Transferring Your Car to a Family Member as a Gift in California?

Are you considering transferring ownership of your car to a family member or friend? There are many different reasons why a car owner might want to transfer or gift a car to a family member or friend. Parents often gift their kids an old family car so they don’t have to worry about purchasing a new or used car. Seniors may gift a car to family or friend because they no longer want to pay maintenance costs or simply don’t really drive anymore.

Whatever your reason for transferring ownership of your car as a gift, it’s not as simple as handing the keys over. In the state of California, you will need to complete a series of steps before you can successfully transfer your car over as a gift to a family member or friend. You can find online guides on how to gift a vehicle in California, but here are a few things to keep in mind:

Gifting a Car Changes the Official Owner of the Vehicle on all DMV Records: Therefore, you’ll need to have the title to the vehicle in order to gift the automobile. If you still owe money on a car loan, you will not be able to gift the vehicle until your commitment to the financial institution is complete, and the title is released.

The Vehicle Will Be Reclassified Upon Transfer: This means that the California DMV will reassess the vehicle’s value and determine the vehicle’s license fee. The reclassification will be based on the current market value of the car.

The New Owner Will Have to Pay a Transfer Fee: This must be done within thirty days of the transfer, and the new owner is also responsible for any past late fees and penalties.

Once the title transfer is complete, you can either obtain a registration for the vehicle then and there if you plan to operate the vehicle or obtain tags at a later time if the vehicle will not be operated. Once registered, you will be required to renew the registration every year which you can do online with a service like eTags. Smog inspections are required every other year but newer vehicles and other models may be exempt.